Estate planning goes well beyond wills and trusts. It’s about creating a proactive plan that preserves your client’s wealth, minimizes tax impact, and supports their long-term financial goals.
What do financial professionals bring to the table for their clients’ estate plans? Personalization. Financial professionals know their client’s unique situation and can help them build an estate plan that aligns with their other financial goals. Whether this strengthens client ties or leads to referrals, there’s much for an advisor to gain from offering estate planning services.
Financial professionals must be equipped with a wide range of strategies and tools to offer the personalization that clients, especially high-net-worth clients, require.
Here’s a high-level overview of six estate planning strategies and the types of clients who may benefit from them.
Estate Planning Strategies for Clients
#1: Estate, Gift, and Generation-Skipping Transfer Taxes
The federal transfer tax system includes three essential taxes: estate, gift, and generation-skipping transfer tax (GSTT). These taxes can significantly affect high-net-worth individuals and families, but proper planning can reduce the impact.
In 2024, the federal government allowed a specific exclusion amount of $13.61M per individual to be exempt from estate and gift taxes, with a similar exemption for GSTT. However, these exclusions are set to decrease by half on January 1, 2026, so tax-advantaged solutions are essential for clients who want to maximize wealth transfer while minimizing tax liabilities. Planning early, with the guidance of experienced professionals, can help clients take advantage of strategies that preserve wealth for future generations.
Watch: Estate Tax Explained | Estate Planning Webinar Series
#2: Split-Dollar: Reducing Gift Taxes While Funding Large Premium Cases
Many wealthy individuals consider purchasing life insurance as part of their overall estate plan. To keep life insurance death benefits out of the taxable estate, clients often fund policies owned by an irrevocable life insurance trust (ILIT). However, large premiums can trigger gift taxes if they exceed the annual exclusion ($18,000 in 2024) or lifetime exemption ($13.61M in 2024).
A private split-dollar loan (PSDL) minimizes this by having the client lend the premium to the ILIT, reducing the taxable gift to the interest on the loan. This helps clients preserve their gift tax exclusions while securing estate liquidity.
#3: Dynasty Trust Estate Planning for Ultra-Wealthy
Dynasty trusts allow families to transfer wealth across multiple generations while minimizing estate taxes. This can be a good option for clients who wish to provide a legacy that offers financial security past their immediate children to future generations. Dynasty trusts also allow clients to provide guidance beyond their death regarding who should receive distributions, when, and how much for future generations.
A dynasty trust can be funded with many types of assets, although life insurance is often used to maximize the wealth transferred to the trust beneficiaries.
#4: Spousal Lifetime Access Trusts
When considering an ILIT, the word “irrevocable” can intimidate clients who want to maintain some flexibility while preserving their wealth. Fortunately, there’s a way to build flexibility within an ILIT using spousal lifetime access trusts (SLATs).
SLATs allow clients to make irrevocable gifts to their trust while maintaining access to gifted funds through their spouse. By placing life insurance policies in an irrevocable trust, clients can remove the death benefit from their taxable estate while offering liquidity for estate taxes.
Watch: Flexible Estate Planning with Irrevocable Trusts | Estate Planning Webinar Series
#5: Estate Planning for Blended Families
Clients with blended families, otherwise known as those with children from multiple marriages or complex family dynamics, can have more complicated estate planning needs. For example, clients may need to balance competing interests between current spouses and children from previous marriages.
Trusts, such as qualified terminable interest property (QTIP) trusts, can ensure that a surviving spouse is provided for while preserving assets for children from earlier marriages.
#6: Charitable Remainder Trust
A charitable remainder trust (CRT) is an irrevocable trust that transforms highly appreciated assets, such as stocks or real estate, into a reliable income stream while minimizing current income taxes through tax-efficient asset transfers. This strategy particularly benefits individuals holding capital assets or real estate who seek to generate consistent income while supporting their favorite charitable causes.
By effectively utilizing a CRT, clients can significantly reduce their estate taxes and leave generous gifts to their chosen charities, all while enhancing the estate for heirs and securing a lasting legacy.
Related: The 2025 Estate Tax Exemption Sunset is Coming: Are Your Clients Prepared?
The Value of Personalized Estate Planning
Estate planning is a vital service that allows financial professionals to help clients protect their wealth, minimize tax liabilities, and secure a lasting financial legacy—all tailored to their unique goals and circumstances.
By incorporating the six strategies outlined above, financial professionals can offer a highly personalized approach to estate planning that aligns with each client’s broader financial objectives. This can help deepen client trust and create opportunities for referrals and future business growth.
If you’re interested in an in-depth exploration of some of the strategies discussed, download the Estate Planning Playbook. This guide for financial professionals breaks down numerous strategies with ideal client profiles and case studies for practical application.
